VanEck Announces Plans To Launch Ethereum Futures ETF (EFUT)

Prominent investment manager VanEck has revealed plans to launch an Ethereum Futures exchange-traded fund (ETF). Interestingly, this development comes a few hours following news that the US Securities and Exchange Commission (SEC) was looking to fast-track the approval of some Ether futures ETF applications ahead of a US government shutdown. 

VanEcK Set To Launch Ethereum Futures ETF On CME 

According to a press release on Thursday, VanEck announced the impending launch of an Ethereum futures ETF named the VanEck Ethereum Strategy ETF (EFUT).

As the fund’s nature implies, EFUT does not invest directly in Ether (ETH) or any other cryptocurrency; rather, it gains value from investing in Ether futures contracts. 

To explain, futures contracts are legally binding agreements to buy or sell a particular asset at a predetermined price on a specified future date. Thus, a futures ETF accrues value by tracking the performance index of these contracts.

When you’re ready, ENTER THE ETHER. The VanEck Ethereum Strategy ETF ($EFUT) is coming soon. Read our press release: https://t.co/4QPOVd5nB2 pic.twitter.com/vSF3HzMuvC

— VanEck (@vaneck_us) September 28, 2023

Based on more information from VanEck, EFUT will only invest in regulated, cash-settled ETH futures contracts listed on commodity exchanges certified by the Commodity Futures Trading Commission (CFTC). 

However, EFUT will only invest in ETH futures contracts traded on the Chicago Mercantile Exchange (CME), which will also serve as the Fund’s debut platform. 

Upon launch, the VanEck Ethereum Strategy ETF will be managed by Greg Krenzer, a long-time staff member with over 20 years of experience in asset trading and the current Head of Active trading at the investment firm. 

It is worth noting that EFUT will not represent VanEck’s first stint in the futures ETF market. In 2021, the investment manager launched the VanEck Bitcoin Strategy ETF (XBTF), an investment fund that offered exposure to Bitcoin futures contracts. 

Analyst: Ethereum ETF Process Speeds Up

As earlier stated, VanEck’s announcement of the upcoming launch of its Ethereum Strategy ETF was preceded by reports of the SEC’s intentions to accelerate the approval of Ethereum futures ETF applications. Bloomberg analyst Eric Balchunas shared this development via a post on X on September 27. 

Balchunas quoted anonymous sources stating the SEC had requested that asset managers looking to offer Ether futures ETF update their filings by Friday, as the commission looks to clear some of these funds for launch as early as next Tuesday because of a possible government shutdown. 

For context, the US government could experience a partial shutdown if its Congress refuses to approve the four spending bills that are currently under deliberation. 

Anything but a positive consensus by the US legislature on these bills by October 1, at exactly 12:01 a.m. ET will negatively affect the finances of various government services, among other things, in the coming fiscal year. 

Nevertheless, following VanEck’s latest announcement, it appears that Balchunas’s scoop on this Ether ETF saga could be right. If so, investors could expect more positive updates from other asset managers in the US Ether futures ETF, most notably Valkyrie Investments and Volatility Shares, both of which the Bloomberg analyst tipped as front runners for the SEC’s approval.

ETH trading at $1,661.4 on the hourly chart | Source: ETHUSD chart on Tradingview.com

Featured image from Marca.com, chart from Tradingview